Managed care systems like HMOs, PPOs, and POS plans aim to control rising healthcare costs through mechanisms like exclusive provider networks that offer discounts, requiring precertification of treatments, and utilization review to assess efficient and appropriate use of resources. Quality Improvement Organizations work with managed care plans to ensure care meets standards through peer review and recommending actions. Prior approval is also important to confirm medically necessary services but is often unknown to patients who must always call to get it.

1. The Blue Plans, Private Insurance and Managed Care PlansChapter 11

2. Healthcare Reform Cost of healthcare High tech equipmentExpensive medicationsUninsured AmericansFraudInefficency

3. Managed Care SystemsEPO“Exclusive”Regulated by insurance statutesFMCMember physicians bill foundation directlyReimbursement is proportional to number of medical services delivered

4. Managed Care SystemsIPAContractual arrangement to treat HMO patientsDiscount of up to 30%PPOCoinsurance requires patient to pay 20-25% of allowed amount“network discount applied”Pre-certify

5. Managed care SystemsPPGFlexible Portion of physician income covers joint expensesPhysician ownedPOSPrimary care PhysicianUse network Providers

6. Quality Improvement OrganizationMedically necessary, appropriate and meet standards of careAKA Professional or Peer Review OrganizationsReview and recommend action

7. Utilization Review/ManagementAppropriate and efficient use of resourcesCost effective manner

8. Preauthorization/prior approvalVERY IMPORTANT!Unknown to patientsMust be medically necessary serviceALWAYS CALL!